2017-12-05 00:00:002017-12-05 00:00:00https://quickbooks.intuit.com/ca/resources/business-license/small-business-medical-marijuana-production-licensingBusiness LicenseEnglishFind out what steps you should take to get a licence to grow medical marijuana legally in Canada and what legal hurdles may get in the way.https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/12/22101144/Man-on-small-business-farm-reviews-medical-marijuana-licensing-for-production.jpgHow to Become a Licensed Medical Marijuana Producer

How to Become a Licensed Medical Marijuana Producer

Become an entrepreneurial pioneer in the fast-growing Canadian medical marijuana industry. Opportunities are ripe for companies producing medical marijuana, and submitting a licencing application is the first step. There are legal and industry hurdles to getting government approval, though. Knowing what to expect going in can help you prepare for the challenges ahead.

Starting the Application Process

You may have a grand vision about how you’d like to operate your medical marijuana producing business, but it means nothing without official government licencing. Your journey to licensing begins with obtaining an application form from the Canadian government. Unlike other types of business applications, this form isn’t provided as an online download. To get the form you must send an email to the Access to Cannabis for Medical Purposes Regulations (ACMPR) administration department.

Wait. There’s more. Along with your inquiry email, you’re required to include a completed Security Clearance Application Form and a Security Clearance Fingerprint Third Party Consent to Release Personal Information Form. Clearly, by asking for these forms upfront, the Canadian government is indicating they have a strict screening process for choosing who even gets to fill out an application. This shouldn’t be too surprising, considering the safety regulations in place for creating medicinal products for patients. Be honest when providing personal details, and don’t even think about leaving information out.

Application Review

Let’s assume you’ve successfully submitting all information. What happens next? Your application goes through an initial screening process and administrators review it for completion, and they check your security information. They also go over your business proposal. If your application is deemed incomplete, you’ll get it back with a request to provide additional details. If it passes muster, it moves on to the detailed review.

The detailed review process is where you really go under the microscope. The business proposal you submit should be specific about the capacity of the growing facility, equipment for plant growing and processing, product quality assurance measures and security measures you intend to put in place.

During this review step, you should expect to hear from the Office of Medical Cannabis periodically. Be ready to answer questions and provide additional proof to back up your application.

Licencing and Inspection

Assuming you meet all requirements to be a Medical Marijuana producer, Health Canada issues you a licence and you’re free to start production. However, you’re not free to sell your plant goods yet. Every producer must go through an initial plant cultivation inspection and a pre-sales inspection. Pass those inspections, and you receive an official licence to sell medical marijuana distributors.

Legal Small Business Licensing Hurdles

In an ideal competitive environment, small businesses seeking to produce medical marijuana for Canadian citizens should be on a level playing field with larger enterprises. Unfortunately, this isn’t the case, and many small business owners fear being shut out of licencing by larger operators.

As reported by the Financial Post, small businesses that are firmly rooted in what is popularly known as Cannabis Culture are finding it difficult to “go legal” in the government’s eyes. This segment includes some marijuana dispensaries and small enterprises run by people who championed legalization. Some would-be legal growers previously ran afoul of the law, and cannot pass a criminal-records check or gain the necessary security clearances.

Having any past criminal problem can make passing legal muster hard prospective owners and employees. Even if you’re clean as a whistle, you may be forced to get security clearances for everyone working at your company. There’s a legal mandate that requires a security-cleared person to be present whenever a non-licenced person is in any room containing cannabis. Overkill? Perhaps, but it’s the law, and you must follow it, regardless of how much the compliance cost and logistics.

Another issue that may work against you is size. Big companies with deep pockets can afford to spend money and employee resources on compliance. But, that doesn’t mean your small business application is a lost cause.

Health Canada Needs More Growers

Health Canada has a problem, and you may be part of the solution. The popularity of medical marijuana continues to grow, and after further legalization, the government is struggling to meet current and future demand. Health Canada is busy approving new licences, and it’s unclear how many more producers are going to be needed to satisfy the demand.

One of the things causing an increase in demand is the abandoning of traditional prescription medications for prescription medical marijuana. Considering how large the prescription drug market is, that’s great news for licenced growers. On top of that, the recreational marijuana market may siphon off some growers who now only serve the medical side of things. Keep this in mind as you put together your business proposal.

Pressure is building on the cannabis supply chain to provide enough raw product to satisfy both marketplaces. Government entities are considering relaxing some criminal history restrictions on producers, and that may be enough to help many experienced people obtain a grower’s licence.

Consider Joint Ventures

Going it alone isn’t the only way to grow legal medical marijuana. If you feel the challenges are too steep to obtain a licence as a single company, you can always seek out joint venture partnerships.

A joint venture is a contractual arrangement between your company and one or more other companies. An example of how this might work is one company provides money and management expertise, and a joint venture partner provides growing and logistics expertise. Imagine joining forces with a partner that complements your strengths with theirs. This may improve your chances with Health Canada significantly.

The process of becoming a licenced medical marijuana producer may be challenging, but the rewards are worth the effort.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.